Business Intelligence, Data Transformation and Better Decision Making

by Lyndsay Wise, President, WiseAnalyticsFriday, April 29, 2011

Whether organizations are new to business intelligence or have mature BI environments, the reality is that many businesses struggle when justifying the benefits that business intelligence provides to the company. Although reporting and analytics lead to better insight into an organization (which should lead to better decision making and planning), the ability to consistently transform the value of data into usable information expands beyond the technical principles of BI’s promise. Even though companies may consolidate data and develop a set of metrics to monitor performance or identify trends, unless this leads to increasing profits and lowering costs it can be difficult to validate the value of the BI initiative. Consequently companies struggle with concepts surrounding the transformation of transactional data into business insight.

This article looks at BI adoption as it pertains to: the transformation of data into information; and an increase in business visibility (both of which can transform BI into a valuable tool within an organization).

The Difference between Data and Information

Sometimes “data” and “information” are used interchangeably. The real difference in relation to BI involves the general purpose that each term represents. In essence, data reflects the inputs and information identifies the desired outputs. The goal of data is to use transactional and other operational data sources and consolidate it within a centralized environment. The act of consolidation through data joins and identified business rules helps with the transformation of data into information.

A strong data layer provides the basis for turning data into information. On the front end, once data is loaded within a data warehouse and the rules have been defined, using that data to identify trends or to plan initiatives becomes possible. Monitoring performance within business units or developing analytics that look at optimizing business processes create the basis for valuable information. Making sure this information is continuously updated and retains its validity over time leads to more valuable insights. With well-defined BI outputs, organizations can use dashboards, scorecards, and reports to look beyond performance and identify trends, potential issues, and opportunities.

Overall, the differences between data and information are small in terms of definition. When looking at BI, however, the unique value each provides when used with the goal of transitioning from data storage to continual insights means that businesses should consider the value of both when considering the goals of their BI initiatives.

BI and Business Visibility

The essential goal of BI involves the transformation of data into information. Through the development of a detailed data warehousing infrastructure with strong data integration, data can be gathered and utilized to provide organizations with a complete view of what is happening within the company. Some of the business areas this information provides business value for are as follows:

Executive reporting and management insight. Key business decision makers require a bird’s eye view of what is happening within their organization. Dashboards can provide the insight required to plan, manage, and identify opportunities, as well as making sure that all management have access to the same information and data points. This in turn eliminates issues related to keeping information within disparate spreadsheets and analyzing data or budgeting with different perspectives and end goals in mind.

Supply chain management. Although not all organizations require the ability to manage a supply chain, most businesses value their relationships with partners, customers, various business units, etc. Being able to manage how everything fits together both internally and externally to the company provides enhanced value to the organization. Aside from increased visibility to provide better delivery of products and services, organizations can provide more information to their customers and partners while increasing their value to these other businesses. For example, some businesses provide dashboards to their customers to help them manage their accounts or to identify usage over time.

Customer experience. Whether for internal help desks or customer support departments, customer loyalty and satisfaction can make or break an organization. Understanding one’s customers, the issues they are facing, how long it takes to solve their problem, and their overall satisfaction can help companies grow and identify next steps in product or service design. Many businesses use dashboards and analytics internally to monitor these factors and to develop plans of action to make sure that they are moving in the right direction.

Sales and marketing. These business units tend to represent the entry point to BI, with the value being the ability to tie sales and marketing initiatives to overall profits. Although other business areas benefit from business intelligence, tying sales and marketing to revenue is an example of the value of information generated through BI.

Reporting and analytics. General reports or analytics use provide the easiest transition from data to information because end users can see the direct translation of the outputs they desire through data analysis. In addition, the breadth of analytics enables organizations to look at historical trends, text analytics, customer sentiment analysis, or project activities into the future through predictive modeling. Information can be sliced and diced and the interaction can be more dynamic than other aspects of BI delivery.

Other areas that rely on BI are finance and accounting, compliance, HR and operations. Any department within an organization can use the principles of BI to develop access to valuable business information.

Tying Business Intelligence Goals to BI Value

No matter what BI application is used, the reality is that organizations are continuously searching for ways to get more value out of their data. BI provides one of the best ways to transform data sources into interactive information that can lead to better decision making and planning.

About the Author

Lyndsay Wise is an industry analyst for business intelligence. For over seven years, she has assisted clients in business systems analysis, software selection and implementation of enterprise applications. Lyndsay is the channel expert for BI for the Mid-Market at B-eye-Network and conducts research of leading technologies, products and vendors in business intelligence, marketing performance management, master data management, and unstructured data. She can be reached at lwise@wiseanalytics.com. And please visit Lyndsay's blog at myblog.wiseanalytics.com.